Peeking under Wisconsin's deficit blanket

Wisconsin State Roundup

Wisconsin is facing a budget deficit that could hit more than $1 billion
(see related article). In such a context, it's
interesting to note some new and proposed spending measures and the general
level of government spending.

Both the Democratic-controlled Senate and Republican-controlled
Assembly pushed separate economic stimulus bills. The Senate's package
included $158 million in accelerated bonding for the University
of Wisconsin's Biostar project, which is a series of building projects
to increase the university's presence in biological fields.

The Assembly's package sought tax credits for insurance company
contributions to a $100 million venture capital fund designed to
seed entrepreneurial efforts in the state. The Assembly proposed
moving to a single-sales factor in calculating state business taxes.
This move would bring in $80 million less a year in taxes than the
current tax model, which is based on sales, property and payroll.

In October, the state raised the tax on a pack of cigarettes from
59 cents to 77 cents, and added a nickel to the 20-cent tax on cigars
and pipe tobacco. The increased tax is expected to bring in $130
million over two years, with most of that money used to provide
cash-strapped seniors relief from rising prescription drug costs.
Dubbed SeniorCare, the program is set to start in September, and
will shave an estimated 40 percent off the annual drug costs for
income-eligible seniors.

Local governments also face budget dilemmas and have contributed
to the state's financial pinch. An October report from the Wisconsin
Taxpayers Alliance found that local government spending increased
by 54 percent from 1990 to 1999double the inflation rate,
but a bit below personal income growth over this period. That's
a problem for the state because it sends need- and formula-based
aid to local governments; as local government budgets increase,
so does state aid. Last year, such aid topped $1 billion.

The cost of state government itself is also spiraling. A review
by the Milwaukee Journal Sentinel shows that the cost of lawmaking
in Wisconsin has tripled since 1980-twice the rate of inflation
to about $470,000 for each of the state's 132 lawmakers.